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Home My WebLink About2023-08-28 Annual Tax Abatement DCI_ PresentationDepartment of Community Investment 2022 Annual Tax Abatement Report August 28, 2023 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT 2022 Tax Abatement Summary •Real Property Abatements: 5 •Personal Property Abatements: 3 •2 personal property abatements were for projects that also received a real property abatement •Total Estimated Project Costs: $318.9 million •2 projects nearing completion •The Hill apartments (ND QOZB LLC) •GLC Portage Prairie V •Waivers of Non-Compliance •Toyo Seiko; Seaflo; Imagineering CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT 2022 Tax Abatement Summary Real Property Abatement •Property tax deduction from the NEW assessed valuation of a building. •Does not include the assessed valuation of an existing structure. •Does not include land. •Granted by the designating body for the construction of a new structure or a rehabilitation of property in an Economic Revitalization Area (ERA). •Types of abatement in the Municipal Code •Industrial – Multi-Family Residential – Office – Institutional – Hotel/Motel – Retail – Warehouse (3- year base abatement + add-on years = 10-year max abatement) •Mixed-Use: Combination of office, retail, multi-family housing & hotel/motel (3-year base abatement + add-on years = 10-year max abatement) •Single-Family Residential (5-year abatement only) CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT 2022 Tax Abatement Summary: Real Property •Housing units for low- to moderate-income households: 74 of 129 Petitioner Project Description Years Granted Type Estimated Project Cost Estimated New Jobs Number of Housing Units Greenleaf Holdco Pure Green Farms phase 2 (not started)9 Industrial $ 12,130,000 75 N/A JEM Farms South Bend, LLC Red Sun Farms greenhouse (not started)9 Industrial 60,000,000 110 N/A GLC Portage Prairie V, LLC New spec building (construction ongoing)7 Industrial 15,000,000 50 N/A The Monreaux LLC New low-income tax credit housing (not started)8 Mixed-Use 14,000,000 8 60 ND QOZB LLC Apartment building rehabiltation (near completion)8 Residential 27,600,000 10 69 $ 128,730,000 253 129 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT 2022 Tax Abatement Summary: Real Property Estimates at Time of Abatement Approval Petitioner Years Granted Taxes w/o Project Cumulative Taxes Abated Cumulative Taxes Paid Taxes Paid (10 years) Taxes Paid (15 years) Taxes Paid (20 years) Greenleaf Holdco 9 $ 1,400 $ 2,074,500 $ 517,500 $ 805,500 $ 2,245,500 $ 3,685,500 JEM Farms South Bend, LLC 9 8,600 10,311,000 2,726,000 4,175,000 11,418,000 18,661,000 GLC Portage Prairie V, LLC 7 2,300 1,872,400 716,900 1,826,600 3,676,100 5,525,600 The Monreaux LLC 8 1,100 433,500 304,600 489,500 951,000 1,412,500 ND QOZB LLC 8 26,400 1,028,200 1,113,900 1,649,800 2,988,800 4,327,800 $ 39,800 $ 15,719,600 $ 5,378,900 $ 8,946,400 $ 21,279,400 $ 33,612,400 Without Project:$ 398,000 $ 597,000 $ 796,000 •Does not include Pure Green Farms phase 1 (Greenleaf Holdco) •The Monreaux LLC “current” taxes are estimated. Property does not have current tax liability (owned by the RDC) CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT 2022 Tax Abatement Summary Personal Property Abatement •Property tax deduction from the assessed valuation of qualifying equipment. •Types of personal property eligible for an abatement •Manufacturing equipment •R&D equipment •IT equipment •Logistical & distribution equipment CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT 2022 Tax Abatement Summary: Personal Property •Steel Warehouse is expanding its facility to accommodate the new equipment Petitioner Project Description Estimated Project Cost Estimated New Jobs Estimated Taxes Abated (Over 5 years) Cumulative Estimated Taxes Paid Greenleaf Holdco Machinery & equipment for Pure Green Farms phase 2 (not started)$ 68,040,000 75 $ 4,834,800 $ - JEM Farms South Bend, LLC Machinery & equipment for Red Sun Farms greenhouse (not started)118,220,000 110 6,867,600 - Steel Warehouse Company LLC New industrial cold reducing mill equipment (not installed as of 12/31/2022)3,913,000 12 217,700 45,200 $ 190,173,000 197 $ 11,920,100 $ 45,200 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Active Abatements (2013-2021): Private Investment CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Tax Abatements (2013-2021): Real Property •Includes only abatements that have not expired •Excludes Liberty Tower Apartments abatement confirmed in 2018 •Excludes Diamond View Apartments confirmed in 2021 •49 active real property tax abatements in 2022 •Estimated Private Investment: $334 million •Reported Actual Costs: $325 million •2021: McCormick & Ward Bakery reported no actual costs as of 12/31/2022 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Tax Abatements (2014-2021): Personal Property •Includes active abatements in Pay Year 2022 •17 active personal property tax abatements in 2022 •Estimated Private Investment: $83.1 million •Reported Actual Costs: $52.2 million •2021: McCormick has yet to install equipment; $23.77 million in expected private investment CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Active Abatements (2013-2021): Jobs CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Tax Abatements (2013-2021): New Jobs •Includes only active abatements •Excludes Liberty Tower Apartments abatement confirmed in 2018 •Excludes Diamond View Apartments confirmed in 2021 •66 active tax abatements in 2022 •Total Estimated New Jobs: 1,365 •Total Estimated Jobs (retained and new): 3,405 •Reported Actual New Jobs: 1,797 •Total Reported Jobs (retained and new): 3,671 •Average Salary per New Job: $44,900 0 100 200 300 400 500 600 2013 2014 2015 2016 2017 2018 2019 2020 2021 Jobs Real Property and Personal Property: New Jobs Estimated New Jobs Reported New Jobs CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Active Abatements (2013-2021): Assessed Values CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Tax Abatements (2013-2021): Assessed Values •Includes only active abatements •Excludes Liberty Tower Apartments abatement confirmed in 2018 •Excludes Diamond View Apartments confirmed in 2021 •49 active real property abatements in 2022 •Total Assessed Value Prior to Abatement: $22.0 million •Land Only: $3.76 million •Total Assessed Value Today: $219.5 million •Land Only: $7.90 million CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Active Abatements (2013-2021): Taxes Paid CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Tax Abatements (2013-2021): Taxes Paid •Includes only active abatements •Excludes Liberty Tower Apartments abatement confirmed in 2018 •Excludes Diamond View Apartments confirmed in 2021 •49 active real property abatements in 2022 •Total Taxes Paid Prior to Abatement: $620,670 •Total Paid or Owed, Pay Year 2023: $3,193,541 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Tax Abatements (2013-2021): Summary During 2022 – Estimates for Active Tax Abatements Confirmed Through 2021 •Active Abatements •Real Property: 47 •Vacant Building: 4 •Personal Property Abatements: 17 •Total Reported Project Costs: $377.2 million •Estimated Before Project: $417.1 million •Total Reported New Jobs: 1,797 •Estimated Before Project: 1,395 •Real Property Assessed Value in 2023: $219.5 million (900% increase) •Assessed Value Before Project: $22.0 million •Taxes Paid or Owed in 2023: $3,193,541 (415% increase) •Taxes Paid Before Project: $620,670 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Property Snapshots 237 N. Michigan Street LaSalle Apartments •Reconfirmed in 2016, originally confirmed in 2014 •10-year abatement, 4 years remain •Taxes Before Abatement: $11,700 •2023 Taxes: $56,800 •Estimated Taxes After Abatement: $73,600 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Property Snapshots 108 N. Main Street Historic JMS Building •Confirmed in 2015 •10-year abatement, 5 years remain •Taxes Before Abatement: $34,200 •2023 Taxes: $78,600 •Estimated Taxes After Abatement: $121,500 CITY OF SOUTH BEND DEPARTMENT OF COMMUNITY INVESTMENT Property Snapshots 4145 Ameritech Drive Truck Centers, Inc. - Freightliner Western Star Dealer •Confirmed in 2019 •7-year abatement; 4 years left •Taxes Before Abatement: $6,500 •2023 Taxes: $41,100 •Estimated Taxes After Abatement: $307,500